5 Mind Tricks to Help You Conquer Debt

Paying off huge amounts of debt can be emotionally draining. You know that your financial life would be better if you dumped the debt, but sometimes our thought processes can get in our own way.

In many cases, overcoming debt is all about putting mind over matter. Here's how you can do that so you can start making real progress on your debt repayment.

1. The snowball effect boosts your motivation

Financial experts have debated whether the snowball or the avalanche method of paying off debt is the better approach. While the avalanche method (paying off debts with higher APR first) can save you money on interest, most of us are more motivated when we accomplish smaller tasks more frequently.

A study in the Journal of Marketing Research gave participants the tedious task of retyping 150 10-character strings in a Microsoft Excel workbook. In one group, the jobs were broken down into smaller, actionable items and in the other group, the tasks were broken down into equal-sized actionable pieces that made more logical sense productivity-wise.

The group with the smaller, actionable items completed the smaller tasks faster and sped up at the end of each task, showing an increase in motivation. Overall, this group completed the job faster when the tasks were arranged from smallest to largest.

Researchers concluded the same concept would be effective for debt repayment. The snowball method takes that approach. List your debts from least amount to greatest amount, making minimum payments on all debts except the smallest amount. Devote any extra funds to the smallest debt until it is paid off, and move on to the next sized debt. (See also: 6 Secrets to Mastering the Debt Snowball)

2. Brainstorm what your life will look like debt-free

It's not enough to know that your life will be better debt-free. You need to create a visual and spend time reviewing it through your debt repayment process. Your visual can be a written list, a collage of images that speak to you, or both.

Ask yourself, "What would my life look like if I didn't have to pay money toward debt each month?" Here are a few possible perks to focus on:

  • Having less stress.

  • Choosing to work a job you enjoy for slightly less pay.

  • Being able to work less hours and focus on a side business.

  • Having more savings for vacations and other fun expenses.

  • Saving for a down payment on a dream home.

  • Saving for your children's college education.

  • Doing more good with your money, such as donating to a cause you're passionate about.

Choose perks that speak to your core values and what you truly want out of life. When you remind yourself that you want to get out of debt so that you can start a new business or buy the home of your dreams, suddenly that impulse buy of fast food or clothes isn't worth it.

Review these reminders often and keep them in eyesight if possible. It is easy to get pumped about your motivations at the beginning of your journey, but be prepared that the longer it takes you to pay off your debt, the easier it is to lose focus on your actual dreams. (See also: 4 Ways to Make Debt Repayment Fun)

3. Stop underestimating the power of a dollar

Have you ever heard someone justify unnecessary spending by saying, "Oh, it's just five bucks." This mentality is damaging to your finances, both in spending and paying off debt.

Every dollar you spend is one less dollar you can devote to being financially free. Of course, you won't be able to throw your whole paycheck toward debt, but what minor expenses are eating up your budget without you noticing?

If you could cut three dollars from daily spending and direct those funds toward your debt, you would be able to pay off $1,095 by the end of the year. (See also: Get Out of Debt Faster With the "Debt Snowflake")

4. Understand that budget cuts aren't forever

If you are struggling with finding extra money in your budget, take a critical look at your spending. First, look at all of your monthly subscriptions. What can you live without for a month or two? Six months?

Next, look at your shopping trips. Every time you put something in the cart, ask yourself, "Do I really need this? Is this worth being in debt for?" This can help reduce impulse buys at your favorite stores. Get real with yourself. You might need to avoid going to some shops altogether if they are too tempting. For example, when I was paying off debt several years ago, I had to stop going to Marshalls and TJ Maxx. I just couldn't maintain my self-control and would waste $20–$30 each trip.

Think of budget cuts as a fun challenge rather than a restriction. If you think, "I'll never get to eat out with my friends again," you can derail your progress with negative thoughts. (See also: How a Simple "Do Not Buy" List Keeps Money in Your Pocket)

5. Don't be embarrassed by accountability

Admitting to friends and family that you have a large amount of debt can be embarrassing, especially when you want those close to you to see you as financially secure.

There really is no need to be embarrassed by your debt, since many other people are in the same boat. Instead, tell others about your debt repayment goals to your advantage. Have a friend that always wants to go out to eat or drop a few hundred dollars at the mall? Let them know you are trying to pay off a huge amount of debt this year and that they can help you by not tempting you. Similarly, let family members know your goals and that pricey family trips or gifts are not a possibility this year.

Will everyone take the news well? Nope. In fact, when my husband and I were trying to pay off debt in our third year of marriage, we asked family members if we could forgo individual Christmas gifts. Judging by their reactions, you would have thought I asked them to cancel Christmas altogether. However, my family members aren't responsible for my financial situation at the end of the day; I am. Sometimes we have to have uncomfortable and hard talks with the people we are closest to in order to better our financial goals. (See also: How to Talk to Friends and Family About Money (Without Making Everyone Mad))

Paying off debt, no matter how much, is possible. While you can read all of the tips on how to pay off debt faster, true progress will come when you shift your thought process.

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